For garbage companies, slowdown means there’s less to take out

With the recession causing businesses to slow or shut down altogether, trash is piling up at a slower pace, causing fewer pick-ups and less revenue for dozens of Long Island’s independent carting companies.

The quagmire has even forced some carting companies to slash jobs.

Joseph Ferrante, who owns Unique Sanitation in West Babylon with his father Nick and his brother Glenn, said they’ve recently had to lay off four of the company’s 15 drivers, the first time in the firm’s 54-year history it has made such deep cuts.

Unique, which serviced its first customers out of the Ferrante’s split-level home in Farmingdale, has suffered most from a decline in construction projects. Like most of the other independent carters, Ferrante said.Unique is too small to compete for municipal waste contracts. So the company depends on supplying roll-off containers for construction and remodeling waste. Ferrante is currently owed money from struggling contractors, most of which he’ll never see.

Ronnie Colatosti, an owner of 40-year-old Empire Waste Removal in East Northport, said business is the worst he has ever seen.

“We usually hire an extra driver around this time and we’re not this year,” Colatosti said.

But the slowdown isn’t the only problem for the garbage man. Independent carters are also trying to stave off large carting conglomerates, which continue to grow as they swallow up smaller waste removal firms.

Two years ago, West Babylon-based Winter Bros. Waste Systems acquired the assets of Waste Management of New York and Allied Waste Industries in a deal that made the firm the major player in the Island’s carting industry.

The deal capped a 10-year acquisition spree in which Winter Bros. bought more than 20 local firms, boosting the company to more than 400 employees, 180 trucks and 13 facilities that serve residences, commercial accounts, construction sites and municipalities.

Winter Bros. was helped by a $15.7 million infusion by Canadian investment bank Clairvest Group in exchange for a 36 percent stake in the family-run business in June 2006. Last year, Clairvest sold its portion of Winter Bros. to another Canadian company, BFI Canada Income Fund, which then spent $263 million to own Winter Bros. outright.

It wasn’t a bad payday for Winter Bros., which started with one truck that collected residential garbage in 1950, and now claims more than half of the Island’s trash business.

Another carter that grew through acquisition is Westbury-based Jamaica Ash, which now controls about 25 percent of the Island’s trash collection market. The rest of the business is shared by about 50 smaller carters that still operate independently.

Ferrante said he has turned down offers to buy his company because he isn’t ready to retire. He also said the carting conglomerates continually try to eliminate competition by undercutting prices for waste removal services.

“They are forcing smaller carters out of business,” Ferrante said. “They want us to crawl to them to buy us out.”

These independent carting companies are also battling smaller profit margins due to increased fuel and dumping costs. With tipping fees (the cost of dumping) rising to $75 and more per ton at Long Island town dumps and incinerators, many small carters now take their garbage out of state, where the fees are $10 to $20 less per ton.

Bottom lines are also squeezed for carters with transfer stations, where trash is brought for disposal, because those firms also pay for monthly inspections by the state Department of Environmental Conservation.

But despite the industry’s recent struggles, at least it’s considered cleaner than it used to be. For decades, the industry was tightly connected to the mob, which had a stranglehold on the Island’s garbage industry for three decades until the FBI stepped in.

After independent carters Robert Kubecka and Donald Barstow were gunned down in August 1989 for refusing to join in mob payoffs, the feds accelerated their probe into Long Island carting.

Nine years later, Colombo family boss Andrew Russo and several members and associates of the Colombo family pled guilty to racketeering charges that resulted from the FBI investigation. The FBI said mobsters used arson, extortion and violence to enforce their monopoly.

In January 1999, Luchese soldier Jody Calabrese pled guilty to extortion and conspiracy to murder two people, one a business competitor. In May 2001, Luchese capo and former acting boss Salvatore Avellino also pled guilty to racketeering charges. The FBI proved that Avellino’s crew had controlled portions of the Long Island carting industry since the 1970s. The feds said Avellino used whatever means necessary, including murder and arson, to maintain his control over the industry.

As a result of the investigation, 12 people pled guilty, $7.5 million was forfeited and Avellino’s crew was dismantled.

A study by the Rand Corp. estimated that organized crime’s carting monopoly on Long Island cost commercial customers an additional 50 percent and residential customers an additional 15 percent for carting services.

Not one garbage business leader would talk about the industry’s old ties to organized crime.

No longer controlled by the mob, carters say their newest hurdle is being created by towns that want to reinstitute “flow control.” Once ruled unconstitutional, flow control allows municipalities to force carters to dump garbage in the town it was collected, which the carters hate because it means they can’t take the trash out of state where the dumping fees are lower. North Hempstead is one local municipality that wants to institute flow control.

Ferrante said flow control might make the towns more money, because it forces the firms to pay a town’s tipping fees, but it raises costs for carting companies, which will eventually cost everyone more for waste services.

One comment

I use to work for Barone Sanitation in the summer of 2004 with my buddy AJ. Every Friday, we were sent out on “greasing duty” to grease the palm of many individuals. We often grabbed no show jobs. On Thursdays, we would meet with the Mayor Of Munchkin Land to work with the joint fitters union. They would often demand in the vicinity of 25% of our contracts.

I had no idea what was going on at the beginning. When I realized what was happening, I took off. When I quit, **** Barone ripped my $40 Izod golf shirt that my grandmother got me. When I asked him to reimburse me for it, he told me i could suck it out of his @$$$!!!

About the Author

David Winzelberg covers real estate, franchising, and white-collar crime for Long Island Business News.